Oregon Transportation Electrification Initiative: Opportunities for University/Industry Collaboration and Support Final Report Prepared for: Oregon Transportation Research and Education Consortium (otrec) Prepared by

Acknowledgements

Jeff Allen & Tim Miller, Drive Oregon

Tom Osdoba, Center for Sustainable Business Practices, University of Oregon

James Long, Oregon Institute of Technology, Oregon Electric Vehicles Association

We would also like to thank all of the individuals and businesses that responded to the needs assessment survey. Without their input this evaluation would not have been possible.

CPW Staff:

Robert Parker AICP, Director

Elaine Phillips

John MacArthur

Project Partners:

CPW thanks our sponsoring project partners: OTREC and Drive Oregon

Executive Summary

Several factors make this work important at this point in time. First, through the EV project (http://www.theevproject.com/) and other efforts, electric vehicle supply equipment (EVSE, “charging stations”) infrastructure is being installed throughout the Willamette Valley. Second, with the support of Governor John Kitzhaber and the Oregon Legislature, the Oregon Innovation Council awarded $1.2 million in funding for Drive Oregon (www.driveoregon.org), an initiative to bolster the state’s emerging electric vehicle industry. Finally, electric vehicles are gaining momentum as a pragmatic alternative to traditional internal combustion engines. The ultimate goal of Drive Oregon is to develop a strategy for Oregon’s development as a world class producer of electric vehicles, and to lay a foundation for moving forward through concerted, collaborative effort.

The goal of this project is to support development of Oregon’s EV industry through university/industry collaboration. By assessing the market, Oregon’s current infrastructure assets and needs, the readiness of Oregon businesses to take advantage of this opportunity and the capacity of the stakeholders to collaborate effectively, we are creating a map of strategies that has the potential to significantly impact Oregon’s economy. Joining the strengths of academia and state economic development efforts with entrepreneurial activities through Drive Oregon will allow us to construct a powerful synergy to generate jobs and enter new markets.

Findings

While the findings of our research identified a broad range of opportunities—and barriers, respondents most frequently referred to funding as key to their success. For example, when they were asked an open-ended question about barriers to growth, 54% of the responses related to funding in some form. From direct statements about needing capital, to indicating that consumers needed financial incentives and that gas was still too cheap, the lack of capital access is holding the EV sector back from its growth potential according to the survey participants. When asked what support they most needed to grow, 79% of the responders selected “access to capital.”

Another notable finding from the survey was the tremendous optimism EV business owners had concerning their growth. Nearly half of the entrepreneurs felt that their gross revenues would at least double by 2014, and with the help of Drive Oregon they anticipate adding hundreds of employees to the work force.

Regarding the Oregon University System (OUS) research facilities and other resources,¹ more than half of the survey respondents indicated that this would be a boost to developing their companies. Several respondents mentioned limited access to skilled workers being a barrier to growth. Training interns and developing specific programs to meet the needs of the EV industry could be another function of the liaisons that will result between academia and businesses through the research laboratories.

The Oregon University System has a remarkable array of assets available to support the growth of the EV sector. Each of the universities, as well as some of Oregon’s community colleges have programs devoted to sustainable business, renewable energy, transportation planning, research contributing to battery technology and power train systems, IT and communications, and automotive technology. Moreover, numerous faculty within OUS are interested in the development of electric vehicles and the community colleges are especially eager to partner with the business community on workforce development.

Complementing and partnering with the OUS’ academic departments and faculty, Oregon has three signature research laboratories and numerous interdisciplinary research institutes, business incubators, technology transfer programs and experiential learning programs which make interns available to developing businesses and commercial firms. As a whole, these organizations are eager to partner with industry. At the 2010 Oregon BEST Fest, this relationship was described as the “collaborative commercialization pipeline – from the research funding that generates breakthroughs to the creation and funding of new companies, products, and services that result from this research.”²

The Oregon Transportation Research and Education Consortium (OTREC), a national University Transportation Center, has set out to create a network among the EV industry cluster, state economic development agencies and OUS to maximize the opportunity Oregon has to become a world-class center of EV production and adoption.

Recommendations

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  Invest in Drive Oregon to lead the industry to EV success. Drive Oregon is now receiving funding and can assume its role as Oregon’s lead promoter of electric vehicle industry development. Drive Oregon is in the best position to build momentum and engage the business community to financially invest in the Electrification Initiative. OTREC should develop a strong relationship with Drive Oregon to build its capacity for long-term leadership of the EV industry.
  
• 
  Support the development of a political advocacy function within Drive Oregon. Current industry and marketing analysis, as well as the responses to the survey have indicated the impact government policies and economic development initiatives can have on the success of industry sectors. Drive Oregon should commit significant staff time and resources toward lobbying and building relationships with legislators and government officials, as well as encouraging the political involvement of its constituents.
  
  • 
    Seek approaches to coordinate the OTREC EV Initiative and Drive Oregon so that these initiatives work together to enhance Oregon’s EV opportunities and avoid redundancy. Drive Oregon is the “trade association” of EV companies, and as such is best prepared to act as the emissary and representative of the EV industry’s interests. As an advocate, Drive Oregon will organize initiatives to gain political backing, run events to raise public awareness, and write grant proposals to fund industry growth. Drive Oregon will also act as the primary ambassador to private investors and should be able to refer entrepreneurs to financial resources, public and private, that become available. Drive Oregon will establish a formal relationship with the OUS through OTREC as a means of ensuring entrepreneurial access to research and technical assistance.

    Taking on these tasks leaves OTREC/OUS to be the leader in identifying emerging technologies, best practices, policies, critical relationships and cutting edge opportunities that will advance Oregon’s EV interest over the long term. OTREC needs to stay focused on its research role as a catalyst for industry and policy progress, and do all it can to position Oregon’s EV efforts to be sustained. Communication between Drive Oregon and OTREC should be a regular and consistent priority. It may prove best to hire a communication coordinator to ensure this happens (among other tasks). Mutual support will increase the effectiveness of both organizations while improving access to funding opportunities, possibly through collaborative activities, and eliminating duplication of efforts.

    
    
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  Use the research capacity of OUS institutions to leverage industry efforts. As well transferring technologies and working with Oregon-grown businesses to commercialize their products, OUS research capacity and assets can be attractive for established companies who may be seeking to locate a new facility for better access to technology development support, a capable workforce and an EV friendly business environment. In both cases, the resources available through the OUS can be used to promote the success of EV production in Oregon.

  OTREC will need to conduct outreach and networking among Oregon’s laboratories, universities, community colleges and business organizations to ensure that technical capacity and workforce training are aligned for EV entrepreneurs, large and small—and that consortium members can easily collaborate and engage in the stimulation of shared ideas. This is no small task—as is evidenced by the inventory of programs and faculty interests presented in Chapter 2 of this report. OTREC should also further investigate what will enable EV businesses to engage with OUS and set a permanent pathway in place. This may require hiring a liaison position, and consideration of where that position should be housed will take some deliberation.

  
  
• 
  Recognize and prioritize the technologies that have the biggest potential to create growth, both in the electric vehicle industry and in interconnected industries as well. For example, battery technology is the most expensive and complicated component of EVs. The impact of batteries on the price, safety and range of EVs will make or break their acceptance by consumers. Investing in technology improvements will be essential for moving cars into the marketplace, but has additional benefits for industries including energy storage and electronic components. Similarly, telematics installed in EVs to monitor performance have applications in providing data for the development of smart grids.
  
• 
  Promote collaboration as a foundational strategy to engage public and private resources. The State can develop business friendly policies and generate effective economic development programs; the Oregon University System can support entrepreneurs in developing and testing their technologies, and Drive Oregon can become the networking and communication coordinator with Oregon’s EV sector.
  
  • 
    Creating an EV community culture and shared identity, such as has been created in the Silicon Valley and Route 128 will spur innovation and inspire capital investment.
    
  • 
    Collaboratively staging high profile public events and demonstrations, such as Portland’s Electric Avenue,⁴ will contribute to public awareness of electric vehicles and hasten the growth of this sector.
    
  • 
    Leveraging this successful collaboration will increase consumer and commercial customers, attract investment capital and encourage further federal funding for Oregon’s economic development.
    
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  Continue working to create and promote a more robust platform for coordination and interaction. The OTREC website (http://otrec.us/research/Transportation_Electrification_Initiative) is a good place to find links to news and resource information, if someone knows to look there, and plans are underway to improve both visibility and content.⁵ Drive Oregon has a website and has added a Google Group that allows discussions and posting of relevant information. Drive Oregon members are automatically added as they join the organization. The Oregon Electric Vehicle Association (OEVA) sends out a weekly digest of news articles and event schedules that is also helpful, and OEVA is also using social media to keep in touch with people who have opted in. Attention needs to be given to coordinating these resources and upgrading Internet communication to the EV community. An interactive site like Oregon State University’s Ecosystem Commons (www.ecosystemcommons.org) would be an ideal platform to inspire communication and collaboration. Moreover, designating a social media/communications staff person will be immensely helpful for ensuring that the largest number of stakeholders is receiving outreach and can be engaged in campaigns and decision-making opportunities. This will be critical to building support and following through on the potential of collaborating on the growth of the EV industry.
  
• 
  Develop a strategy for attracting on-going research dollars from private investment as well as grant sources. On-going public and private support through grants and investments is likely to hinge upon ensuring that research projects resulting from the EV initiative are a direct response to industry needs. With the constraints on federal spending, research universities must compete more effectively for support. Collaborations with industry make academic projects much more compelling.⁶ Both OTREC and Drive Oregon will need to pursue funding opportunities. Care should be taken to identify this function within a staff member’s job description such that it is connected to a clear vision and is informed by the activities of the consortium. Defining mission, scope and stakeholder roles are crucial to ensure fundraising activities are efficient.
  
• 
  Value the OUS business schools as necessary collaborators in this consortium. Science creates technology, but scientists are not necessarily the best business people. Marketing, commercialization, business efficiencies and supply chain management are needs that emerged from the survey of business owners. These areas of concern, as well as strategic planning and attracting investment capital may well be improved with the support of professors and interns from Oregon’s university business schools and institutes. Specific projects should be developed for EV companies and relationships with academic programs such as the UO’s Center for Sustainable Business Practice (http://www2.lcb.uoregon.edu/App_Aspx/CsbpAbout.aspx) or PSU’s Capstone Consulting Experience (http://www.gradbusiness.pdx.edu), will be profitable for industry and academia alike.
  
• 
  Incorporate the community colleges into this collaborative network. With their focus on vocational training and workforce development, community colleges are obvious partners and eager to be included. Many of them are experienced in forging relationships with industry and developing specific workforce training programs to respond to business needs. They also have experience in obtaining federal and state support to fund workforce training and partnerships. As well, many of Oregon’s Small Business Development Centers (SBDC) are housed at our community colleges and provide shoulder to should assistance with new small and micro-enterprises.⁷ Many of the members of Drive Oregon, and respondents of the survey are small businesses that may initially grow more rapidly with SBDC assistance. OTREC could initiate the inclusion of community colleges in the consortium by reaching out to the Oregon Department of Community Colleges and Workforce Development and move forward from there. OTREC could also facilitate/start a collaboration among either the state small business development centers and/or the Portland Business Accelerator, and the research labs and DO could develop a specific plan to focus tech transfer support small businesses.
  

Chapter I: Introduction

Background

“OTREC’s Transportation Electrification will serve the Pacific Northwest region by identifying, field-testing, and generalizing knowledge about the practicality and suitability of promising mobility strategies, technologies, services, and practices that help mitigate pollution, congestion, and dependence on foreign oil.

The Initiative will employ a ‘living laboratory’ approach that uses local settings and organizations to test a range of projects, many of which are expected to focus on urban freight mobility, consumer behavior, transport telematics, and transportation electrification and the impact on and integration with the electric grid… The Initiative will build capacity within the OUS and will support students and faculty as they plan for, field test, evaluate, experience and report on research transportation electrification. The intent is a truly collaborative and cross-disciplinary approach with various parties and partnerships to deliver education, training, and research and information exchange accelerating the adoption of electric vehicles and the development of a smart mobility system within a smart grid. The Initiative will provide policy and technical guidance to the state and nation, and help solve research questions for transportation electrification.” ⁸

The intent is that the Initiative will conduct research through a coordinated regional demonstration of EVs and will focus on the following areas:

• 
  Vehicle monitoring
  
• 
  Battery performance testing
  
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  Infrastructure planning and modeling
  
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  Charging methods and infrastructure evaluation
  
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  Data acquisition and data analysis
  
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  Market acceptance analysis
  
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  Consumer demand and behavior assessments
  
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  Governance and policy analysis
  
• 
  Economic and environmental analysis⁹
  

With federal and state support, OTREC has set up a consortium for research and collaboration. As important as research is, the greater value of the consortium is its potential for translating research into jobs and economic growth. Scrutiny of the electronics revolution in the Silicon Valley reveals the invaluable multiplier effect that investing in this type of consortium can have. An industrial ecology is created whereby and interdependence is encouraged and companies are able to compete and specialize, and supply the needs of one another. New ideas are generated and spark complementary innovations; the employee pool is cross trained and expanded as workers change companies and work on collaborative projects. Interactive feedback loops propel rapid technological evolutions and lead to industrial superiority beyond the region.

Professor Frederick Terman noted the stimulating effect that the relationship among MIT, the Department of Defense and businesses had, and took that observation west in 1946 when he became the Dean of Engineering for Stanford University. Building on his experience with collaboration, he cultivated a “community of technical scholars,” and he promoted more open and reciprocal ties among businesses and the university than had existed back east. Thus began the unique environment that culminated in the explosive productivity that is the Silicon Valley.¹¹

Harvard Professor Gary Pisano noted that industries like semiconductor chips — the heart of computers and consumer electronics — require the establishment of “an industrial commons,” the skills shared by a large, interlocking group of workers at universities and corporations and in government.¹² The collaborative relationship between Stanford University and the hundreds of companies that resulted provide a relevant model for OTREC, DO and our entrepreneurs.

The growth of the electric vehicle industry has the potential to substantially impact Oregon and the nation on many levels. Moving toward energy independence and alleviating the global political tensions that result from foreign oil addiction are critical. Just as important, EVs and supporting technologies, especially battery technology and telematics, are domains where our characteristic ingenuity can put Americans back to work manufacturing components needed around the globe.

Pisano and Shih wrote the following in the Harvard Business Review:

Rebuilding its wealth generating machine—that is, restoring the ability of enterprises to develop and manufacture high-technology products in America—is the only way the country can hope to pay down its enormous deficits and maintain, let alone raise, its citizens standard of living. Reversing the decline in competitiveness will require two drastic changes:

The government must alter the way it supports both basic and applied scientific research to promote the kind of broad collaboration of business, academia and government needed to tackle society’s big problems.

Corporate management must overhaul its practices and governance structures so they no longer exaggerate the payoffs and discount the dangers of outsourcing production and cutting investments in R&D. ¹³

The use of the 2009 American Recovery and Reinvestment Act for transportation research and battery technology represents the altered approach Pisano and Shih are advocating. As well as investing in transportation the ARRA provided funding for scaling up production so that the United States can compete with Japan, Korea, and China in EV batteries.¹⁴ Because of this, the Department of Energy estimates that the U.S. will be producing 40% of the world’s lithium-ion batteries by 2015, up from 2% in 2009. The New York times quoted Arun Majumdar, the head of the Department of Energy’s Advanced Research Projects Agency-Energy (ARPA-E) stating: “Whichever country figures out how to lead in the production of lithium-ion batteries will be well positioned to capture a large piece of the world’s future economic prosperity. The batteries,” he stressed, “are essential to the future of the global-transportation business and to a variety of clean-energy industries.”¹⁵

A second component of electric vehicles that has the potential to create related business opportunities is telematics. Oregon has a high level of expertise in clean energy and data management related to energy use. Telematics are used both to monitor basic vehicle performance and to connect vehicles to emergency services and streaming information on traffic and weather. Telematics can also enable access to cloud computing. In addition to providing electric vehicle drivers with unique information tools, telematics will play an important part in developing smart grid technology. Providing vehicle to grid energy transfer information will help manage demand response.¹⁶

Oregon has been engaged in EV development in the private and public sector for years, and OTREC is joining these entities to give Oregon an organizational advantage in addition to our technical edge. As part of the broader initiative in support of EV research, OTREC and the executive leadership of Drive Oregon have come together with the help of the University of Oregon’s Community Planning Workshop to create a strategy of commercialization through collaboration among industry, academia and state directed policies and resources. The survey that is the focus of this report, combined with a map of Oregon University resources, will inform that strategy.